President Bush’s budget would produce deficits totaling $2.75 trillion over the next decade, the Congressional Budget Office projected yesterday in the first authoritative look at the plan’s longer-range implications.
The forecast — $737 billion worse than the budget office expects should Congress ignore Mr. Bush’s tax and spending plans — is sure to factor in to this year’s presidential and congressional campaigns.
Mr. Bush sent lawmakers a $2.4 trillion budget for 2005 on Feb. 2, but it was projected outward only for five years. The White House argues that longer-range forecasts are guesswork, but Democrats say the administration wants to hide future deficits that will career out of control as baby boomers begin to retire.
The nonpartisan budget office also forecast that the president’s fiscal plans would produce deficits of $478 billion this year and $356 billion in 2005. Both figures are smaller than the shortfalls that Mr. Bush has projected for those years.
For the decade ending in 2014, however, annual shortfalls never would be smaller than $242 billion, which would occur in 2007, the budget office said. After that, they would bounce as high as $289 billion seven years later.
Last year’s $374 billion shortfall was the largest in dollar terms.
Two days ago, Federal Reserve Board Chairman Alan Greenspan focused attention on the government’s long-term fiscal problems by suggesting cuts in Social Security benefits to ease cascading red ink. Members of both parties quickly rejected benefit reductions.
Democrats, though, hope to use the prospect of massive, unrelenting shortfalls as a symbol of what they say is Mr. Bush’s mismanagement of the economy. Republicans blame the red ink on recession and the costs of war and terror and say the president has focused his attention on those problems instead of balancing the government’s books.
Yet underlining their sensitivity to the deficit problem, six conservative senators sent a letter this week asking Senate Budget Committee Chairman Don Nickles, Oklahoma Republican, to produce a fiscal blueprint for balancing the budget in seven years. That would exceed Mr. Bush’s goal of halving shortfalls in five years.
One major item omitted by Mr. Bush’s budget but included in yesterday’s projections was the cost of his proposal to make tax cuts permanent that otherwise would expire in 2010. Mr. Bush’s tax plans would add more than $1.3 trillion to deficits over the decade, although his plans to curb domestic spending would save $700 billion over that same period, the budget office said.
Wary of the impact on deficits, Republican congressional leaders already have said they will not move this year on the Bush proposal to extend the tax cuts, which is the pillar of his plan for strengthening the economy.
The top two Democratic presidential contenders, Sens. John Kerry of Massachusetts and John Edwards of North Carolina, have said they would roll back the reductions for the wealthiest Americans.